Amidst all these developments around the 8th Central Pay Commission (8th CPC), a key question that has dominated discussions among central government employees and pensioners is – will the Union Budget 2026–27 provide funds for implementing the new pay scales?
This query was formally raised in the Lok Sabha on Monday, where MPs asked the Finance Ministry whether the government had made any budgetary preparations for the 8th CPC, especially since the Commission was earlier expected to take effect from January 1, 2026.
Why the question matters
Traditionally, a Pay Commission’s recommendations, once scheduled, require advance budget planning.
If the 8th CPC were implemented from Jan 1, 2026, its financial impact for the first three months (January–March 2026) would have fallen under FY 2025–26. But the 2025–26 Union Budget did not include any provisioning for 8th CPC payouts, salary hikes, or pension revisions.
This meant the bulk of expenditure — hiked salaries, revised pensions, and the first instalment of arrears — would logically have been accounted for in the 2026–27 Budget.
However, the situation has changed drastically.
8th Pay Commission delayed; work has only just begun
Responding to a query, the Finance Ministry confirmed in Parliament that the 8th Pay Commission has been constituted. Its Terms of Reference (ToR) were notified only on 3 November 2025.
The Commission, however, will take up to 18 months from its constitution to submit recommendations. This means the 8th CPC is still at a very early stage — far from the point where salaries or pensions can be revised.
What the Finance Ministry said on fund allocation
A direct question was posed: Whether the government proposes to allocate funds for implementing the 8th CPC in the 2026–27 Budget, and if so, the likely expenditure and action taken?
The Finance Ministry responded by saying that the date of implementation has not been decided.
The government will make appropriate provision of funds when it decides to implement the accepted recommendations. No specific allocation has been indicated for Budget 2026–27, since the recommendations are not expected anytime soon, the ministry said.
In simple terms, there will be no 8th CPC expenditure in Budget 2026–27 because the Commission has only begun its work and will take at least 18 months to conclude.
When will the 8th CPC actually be implemented?
Although the Terms of Reference were notified on 3 November 2025, the Commission has been given 18 months to submit its report, which places the deadline around mid-2027. After that, the Government will require an additional 3–6 months for examination of the recommendations, inter-ministerial consultations, and Cabinet approval.
Considering this full timeline, the earliest realistic window for implementing the 8th CPC would be late 2027 or the beginning of 2028.
Who will benefit?
The government confirmed updated numbers: 50.14 lakh Central Government employees and around 69 lakh pensioners. Together, nearly 1.2 crore people stand to be affected by the Pay Commission’s decisions.
Meanwhile, the ministry has stated that the 8th CPC will devise its own methodology, including how and when to consult employee unions, pensioners’ bodies, and state governments.
Summing up…
So, it is clear that Budget 2026–27 will not include funds for implementing the 8th Pay Commission, because the Commission’s work has just begun and will take nearly two years to complete.
The financial provisioning for revised salaries, pensions, and potential arrears is expected only around 2027–28, when implementation becomes realistically possible.